The do's and don'ts of finances for newlyweds

by Saving with Spunk

Finances for newlyweds are the last thing on your mind when you're blissfully floating in a perfect world with your new boo. But money fights and money problems are the leading cause of stress in a relationship and play a role in every leading cause of divorce. Money is a necessity to understand and communicate with your spouse on.

The Do's of Finances for Newlyweds

Do Talk About Your Financial Past & Future
Unfortunately, I still hear stories about couples who don't talk about their financial situations until their marriage is already suffering from it. It is essential for couples to upfront and honest about their finances.

First talk about your history with money. Were you ever told 'no'? Did your parents talk about money with you? What negative and positive experiences you've had with money? These answers can tell you a lot about your spouse's point of view and that's important to keep in mind as you navigate tough financial decisions.

Then talk about your future, establish your "why" for the financial decisions you're making. Couples who have goals but no reason behind them often don't see them through. Once you have your "why" establish goals around it. These can include saving an emergency fund or getting out of debt but think bigger than that. Do you want to retire early? Be a stay-at-home mom? Buy a homestead and live off the grid? Think big and keep your "why" in mind.

Talking about the future should also include some decision consensus. Like how you'll deal with unplanned expenses, charitable giving, what to do when family or friends ask for money, beneficiaries, and legal stuff. When money situations come up they're usually pretty emotional so take the time to establish what you agree on and what you're going to compromise on. You won't catch everything up front but it'll be better to navigate those first few years with some guidelines.

Do Create a Budget
My life changed in so many ways when I got married. Amidst all the change we started budgeting together. Every couple starts new habits in their new marriage; you can make them healthy ones.

We look at our schedule the last week of every month and set aside an hour to do our budget. I make the budget then I give it to him and he has to change one thing about it. Our first few budget meetings were definitely longer than expected and went on throughout the month. But sticking with it, even when we failed, is what has kept us on track to achieving those goals we set.

Pro Tip: The budget is about more than creating healthy financial habits, it makes you work as a team. And there's no better feeling than having your spouse as your co-captain, conquering the world together!

Do Merge Finances
If you have the same why, share goals, and budget together, you should combine your incomes. The main reason is that it makes your life easier; the underlying reason is the accountability it gives you when spending. There's a transparency in combining bank accounts that's painful but healthy for your marriage.

The stipulations for this would be for a spouse who has their own business. That income should be kept separate but you should get to a point where you're paying yourself a salary and that should be combined in your joint account. And, while incomes should be combined, your debts should be kept separate. This is to safeguard you if your spouse dies or in the unfortunate case of divorce.

Do Set up Your Retirement Accounts
If you get married at a stage where you're out of debt and have savings then don't wait on setting up Roth IRAs. Even if you don't max them out the first few years the longer money sits there the more it'll grow to. #CompoundInterest

Do Get Part-Time Jobs
There's no better time to hustle than when you're young, broke, and married. The main secret to our success is how hard we work. We both have multiple jobs and plan on keeping them until we're debt free, have an emergency fund, and a down-payment on a house.

I know people say the first year of marriage is special and you should spend it enjoying each other and learning new things. But A) it doesn't take 365 days to have these conversations and B) I will enjoy my husband so much more when we've paid off our student loans and are on a cruise to the Bahamas (paid for in cash.)

Some goals you'll work really hard on for a short period of time and others will take time and you can relax. But you should have goals and always be working towards them.

The Don'ts of Finances for Newlyweds

Don't Buy a House
Dave Ramsey says "It takes a year of marriage to know how close buy from your mother-in-law." Man's got some wisdom. So even if you can afford it, wait a bit to figure out some things because it's very probable that in your first year of marriage some of those "whys" and goals will change.

Don't Upgrade
Who said just because you're a Mrs. you need a Kitchen Aid (not knockin, I love mine) or because you're hitched you need a new giant TV Screen (your video games will look just fine on the old one.)

Don't fall into this trap of upgrading just because you're married. It's better to take your clothes to the laundry mat (or mom's house) until you can afford that washer and dryer, don't waste money financing it. Save up and pay cash for things you want.

Don't Have a Baby
Babies require a lot of upfront costs and when you're laying the foundation for your finances they can throw a real wrench in it. Consider waiting until you've accomplished a few goals to have kids.

I'm all for having kids, I want to stay at home with mine and adopt, that's why I'm working the extra hours now and making sacrifices today so they can benefit later. (But don't get me wrong they're getting jobs, just like we did, when they turn 16.)

Also, don't get a dog just because you're waiting to have a baby. That's wrong on so many levels.

Don't Keep Secrets
One time I bought a bottle of vodka (that was over and beyond my personal budget) and didn't tell my husband. I don't remember how he found out but I remember he wasn't mad that I broke the budget, he was just confused and disappointed as to why I didn't tell him. I learned that day that money is about more than your finances, it's the most intimate thing outside the bedroom and your spouse should be part of it.

There you have it, a brief guide to finances for newlyweds. I'm going to quite a few weddings in the next couple months and I'd love to dedicate this post to those couples. Marriage is the friggin best when you work together, communicate, and keep laughing. Blessings to you and your new adventure!

The post The do's and don'ts of finances for newlyweds appeared first on Saving with Spunk.

RELATED: 6 ways Americans waste money

6 ways Americans waste money
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6 ways Americans waste money

1. Overspending on Education

The U.S. spends more on student education each year than most other countries, according to a 2013 report by the Organisation for Economic Co-operation and Development. Yet despite spending more, American students don’t perform as well on test scores.

Furthermore, college tuition continues to climb in the U.S. and family income hasn’t kept up, according to a recent report from The College Board.

Choosing to stay inside your home state for college can be a smart move for your pocketbook. Average in-state tuition and fees at a public university is $9,650. You’ll pay more than $15,000 to cross state lines, with average out-of-state tuition and fees at public universities at $24,930. Meanwhile, tuition and fees at private colleges averages $33,480.

Find Out: Student Loan Debt: Is College Tuition Worth the Cost?

If you really don’t want to waste money, consider community college, said Timothy Wiedman, a retired associate professor of management and human resources at Doane University in Crete, Neb. The average cost of in-state tuition and fees at a community college is $3,520.

“Completing a two-year transfer program locally while living at home — and then transferring to a more expensive four-year school to complete a bachelor degree — will often save a great deal of money,” he said. And the coursework will be virtually identical, he added.

2. Purchasing Expensive Diapers

Diapers are a messy business, and an expensive one for parents. According to Babies R Us, a baby will need up to 3,360 diapers in the first year of life. If you spend an average of 25 cents per disposable diaper, that is $840 for the first year.

Diapers are a necessity when welcoming a new life into the world, but don’t use them longer than required. “People waste hundreds, if not thousands, of dollars by believing that children need to wait until certain things happen before they can potty-train their children,” said Michelle Swaney, owner of The Potty School, where she teaches people how to toilet-train their children ages 18 months and up.

In fact, the U.S. lags in toilet-training when compared to some other parts of the world. For instance, Vietnamese babies are usually out of diapers by 9 months of age, reports NPR. In the U.S., the average age for a child to be toilet-trained is somewhere between 24 and 30 months, which is a conservative estimate, according to Swaney.

America wasn’t always so bad at teaching the bathroom habit. In 1957, 92 percent of children were toilet-trained by the age of 18 months, according The New York Times.

Related: 40 Mindless Ways You’re Burning Through Your Paycheck

3. Buying Unnecessary Baby Stuff

A baby registry checklist often includes every gadget imaginable for infant care. Just for starters, you’ll need a diaper pail that collects dirty diapers, and a bottle warmer that warms milk.

According to the book “Baby Bargains” by Denise Fields, a baby will cost your household an average of $7,000 in the first year alone. With a price tag like that, it’s important to spend money wisely.

So, stick to buying only what is necessary. For instance, do you really need to purchase a Playtex Baby Diaper Genie Complete Diaper Pail at Target for $34.99? Or could you just simply recycle grocery bags to bag up and quickly dispose of dirty diapers?

The same holds true for a bottle warmer. You can warm up a bottle by simply using warm water. And do you really need a specialty baby-food maker, when a regular blender will do the trick?

4. Betting on Lottery Tickets

We all have dreams, but spending cash to become a millionaire shouldn’t be one of them. Americans spent $73.8 billion on lottery tickets in fiscal year 2015, according to the North American Association of State and Provincial Lotteries. A quick look at the Powerball website tells you the odds of winning the lottery grand prize are 1 in 292,201,338. 

Even if you win the lottery, you have to wait to be paid. You also fork over taxes, which can drastically reduce your winnings. Some people believe only the poor play the lottery religiously, but a study in Virginia found that 55 percent of people who play at least once a month have an income of $55,000 or more.

Instead of wasting money on lottery long shots, spend the money on something that’s attainable — such as a dinner out. At least spending in that manner allows you to enjoy yourself.

5. Failing to Shop for Bargains

Never shop without scoping out discounts and deals first. Fail to do so, and it’s basically like leaving free money on the table — which, of course, is never the smartest idea.

“Although today’s online shoppers are very savvy, many do not take advantage of free money, such as cash back,” said Brent Shelton, an online-shopping expert at FatWallet. For example, you can earn cash back by shopping through sites such as Ebates, and many credit cards offer cash-back rewards on purchases, he said.

Savings add up when you take advantage of incentives such as these. Missing such opportunities can leave you feeling cash-strapped sooner. In addition to Ebates, other sites that offer promotions such as cash-back deals include:

  • Coupon Sherpa
  • Ibotta
  • CouponCabin
  • RetailMeNot

Don’t forget to check out individual store saving opportunities too. These include the Cartwheel app at Target and Yes2You Rewards at Kohl’s. Check details of your credit or debit card for other saving and earning opportunities.

Related: Times It’s OK to Buy Used Instead of New

6. Insisting on Lavish Weddings

Your wedding day is supposed to be the best day of your life, so spend a fortune, right? In fact, Americans spend a ton to say “I do” — a record-amount average of $32,641 in 2015, according to the latest survey from The Knot.

Europeans on the other hand, are much more conservative with wedding expenses, spending an average $5,495 on nuptials, according to a survey by ING, the Dutch-based multinational and financial services firm. Europeans would rather spend money on a house than a wedding, the report found. That does make more sense financially than spending cash on an occasion that’s here today and gone tomorrow.

So, how can you save thousands on your wedding? Think smaller — reduce the guest list, buy fewer flowers and settle for a smaller diamond.


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